Who Owns It: Employees & Your Business’s Intellectual Property

Intellectual PropertyIt seems simple enough: if you paid for the work to be done, you should own the work product, right? When the work product is intellectual property, it’s not always so straightforward.

The general rule of law is this: When you hire an employee, you own the intellectual property created by the employee in the course of his or her employment. However, intellectual property that is created by the employee, other than in the course of employment, is owned by the employee, not the employer.

You might have noticed the emphasis on “in the course of employment.” That’s where it all gets tricky. That’s why employers should not rely on an assumption that they own the intellectual property their employees create.

What if the employee is working on something on his lunch hour? Or after hours? Or if they’re an independent contractor? Or if it’s outside of their job description to create the IP but they do it anyway?

A written agreement with the employee that assigns to the employer any and all intellectual property created by the employee during the course of his or her employment will avoid disputes over ownership. If you don’t get it in writing, the employee may have ownership rights in the intellectual property he or she creates while working for you.

Make sure the assignment is in writing and that it clearly spells out what intellectual property is owned by the business and what is owned by the employee. While it is wise to get a signed IP agreement prior to the employee starting work, in Florida, our Employment At-Will laws also include continued employment as valid consideration (e.g. “payment”) for such an assignment. In other words, if you haven’t done this previously, there’s still time. You should make sure to have each employee identify any intellectual property specifically not assigned, usually what he or she owned prior to starting employment. If the employee’s job duties involve the development of new products or innovations to existing products, the creation of branding or marketing materials, or the authoring of other creative works, you should also have the employee periodically disclose intellectual property created for the business as well as any such work created outside of employment.

You should also specify what happens if the employee misappropriates and/or infringes upon the business’s intellectual property and make sure that you can legally enforce the remedies contained in the agreement. For example, most agreements specify that they will have the right to seek injunctive relief to prevent the use or disclosure of company IP by the employee, that the employee may be terminated as a result of such infringement, and that the employee is liable for attorneys’ fees and costs to enforce the agreement.

Finally, you should ALWAYS have a written agreement with any independent contractors who develop IP for your business. The independent contractor agreement should clearly state that the contractyor’s work product is a “Work Made For Fire” under the U.S. Copyright Act, and that any other intellectual property is assigned and will be owned exclusively by your business free of any royalty fee or license.

Because IP law is a complicated area, especially for employers, we recommend that you never draft these kinds of agreements on your own. Instead, call us at 407-792-0790 to schedule a consultation or discuss your options.

 

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